Taxation in Ukraine

There are two taxation systems in Ukraine:

1. General
2. Simplified (payment of individual taxes and fees is replaced by a single tax)

General taxation system:

• income tax - 18% (basic rate), 5%, 0%
• Value added tax - 20% (basic rate), 7%, 0%

Simplified taxation system is divided into four groups:

1. First group:
   • Individual entrepreneurs who do not use employees, carry out retail sales of goods on the markets or provide household services to the population and whose income is not more than 300,000 UAH in a calendar year;
   • Single tax is up to 10% of the subsistence minimum for employable persons, established on January 1 of the current year.
2. Second group (there are restrictions on all types of activities):
   • Individual entrepreneurs undertaking economic activities for the provision of services, including household services, single tax payers and/or population, production and/or sale of goods, activities in the restaurant industry, provided that during the calendar year they meet a combination of the following criteria:
     • they do not use the labor of hired persons or the number of persons who are in labor relations with them, at the same time it does not exceed 10 people;
     • the amount of income does not exceed UAH 1,500,000.
   • Single tax is up to 20% of the minimum wage established on January 1 of the current year.
3. Third group:
   • Natural persons - entrepreneurs who do not use the labor of hired persons or the number of persons who are with them in labor relations is not restricted and legal entities - economic entities of any organizational and legal form, in which the amount of income does not exceed 5 000 000 hryvnia within a calendar year.
   • Single tax in the amount of 3% of the amount of income, in case of payment of value added tax;
   • Single tax of 5% of the amount of income, if the value added tax is included in the single tax.
4. Fourth group:
   • Agricultural commodity producers (a part of agricultural commodity production more than 75% for the previous year)
   • The size of the tax rate depends on: the category (type) of land, their location and the normative monetary assessment, as well as the indexation coefficient determined as of January 1 of the reporting year.

Registration of the payer of the value added tax

Mandatory: when the amount of deliveries of goods/services that are subject to taxation by value added tax has been accrued (paid) to the enterprise during the last 12 calendar months, in aggregate, it exceeds UAH 1,000,000 (excluding those people which are on the first to third group of taxation).

Voluntary: when the taxpayer considers it expedient to register as the payer of the value added tax (on application).

Corporate Legislation of Ukraine